51) __________ says to seek out investments that offer the greatest expected risk-adjusted real return.
A. The Principle of Self-Interested Behavior
B. The Signaling Principle
C. The Principle of Incremental Benefits
D. The Principle of Valuable Ideas
52) An investor's risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
A. An investor cannot change the risk of this portfolio by her choice about personal leverage (lending or borrowing).
B. Selling any stock in this portfolio will lower the beta of the portfolio.
C. Each stock in the portfolio has its own beta.
D. Each stock in the portfolio will have a beta greater than one.
53) Which of the following statements is true?
A. The Principle of Incremental Benefits says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Principle of Valuable Ideas suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Time Value of Money Principle advises to include any time-value-of-money tax benefits from capital structure choices.
D. all of these
54) An all-equity-financed firm would __________.
A. not pay corporate income taxes because it would have no interest expense.
B. pay corporate income taxes because it would have interest expense.
C. not pay any income taxes because interest would exactly offset its taxable income.
D. pay corporate income taxes if its taxable income is positive
55) “Hard” capital rationing refers to the rationing __________.
A. always imposed by competitors
B. imposed internally by the shareholders
C. imposed by external factors
D. always imposed by debt holders
56) A key variable covered in our text for the Black-Scholes OPM is __________.
A. dividends.
B. EPS.
C. transaction costs.
D. the riskless APR with continuous compounding
57) The managerial decision best addresses which of the following questions?
A. How fast should we grow?
B. What size of firm do we want?
C. How should we compensate our managers?
D. all of these
58) The financing decision best addresses which of the following questions?
A. Should we increase our inventory?
B. Should we issue common stock or convertible debt?
C. Should we buy this piece of land?
D. Should we give employees stock options?
59) Which of these investments would you expect to have the highest rate of return for the next 20 years?
A. intermediate-term U.S. government bonds
B. long-term corporate bonds
C. U.S. Treasury bills
D. anybody’s guess
60) Dimensions of risk include __________.
A. the certainty of a negative outcome
B. uncertainty about the future outcome
C. the impossibility of the same return
D. uncertainty about yesterday’s outcome
Total 500 Questions from 5 set of actual exams (5 sets x 100 questions) with double checked answers
final exam str 581
str 581 final exam answers
str 581 final exam
str 581 final
str 581 final exam answers
str 581 final exam
str 581 final
100 % A+ Correct answers !! Double Checked
